Divorce rates have increased exponentially for couples divorcing over the age of 50, a phenomenon known as “grey divorce.” When it comes to older couples, the challenges and considerations differ significantly from those faced by their younger counterparts.
After decades of shared assets, retirement accounts, and estate planning, unraveling the financial web can be overwhelming. Older adults are more likely to have pensions, 401(k)s, IRAs, and other retirement accounts that are either in payout status or being withdrawn to cover basic needs rather than used for future savings. If spouses are still in the workforce, they may be paid by complex compensation packages that include bonuses, restricted stock units (RSUs), stock options, or other job perks.
Long-term marriages often develop adopted roles between the two spouses—a concept of dividing and conquering marital responsibilities becomes the way of living. One spouse establishes and builds their career or business. In contrast, the other spouse focuses on child-rearing, household responsibilities, or a more minor role within the workforce for the marriage. Perhaps one spouse initiates their career years into the marriage while the other spouse has been advancing their career for decades. Perhaps debt was accumulated for one spouse to attend graduate school or pursue advanced degrees to place themselves into a higher earning bracket. While the other spouse financially or otherwise supported them in that endeavor.
When divorce occurs decades later, income differentials between the spouses can lead to spousal support or alimony, and it can be daunting if the amount is insufficient to allow either party to enjoy the same marital standard of living that they enjoyed during the marriage. All of this may be complicated if there is an upcoming retirement or pending fixed income or the receipt of future social security benefits. Adding further whether there should be compensation for any contributions of the less active spouse towards the other’s business or career growth, the allocation of debt associated with one party’s career advancement, and splitting retirement income when older individuals have limited time to recover financially from that division, careful consideration of budgets and future expenses is required.
As couples age, health care is another critical consideration. The divorce process will impact health insurance coverage if one spouse is covered under the other’s employer-sponsored plan. Older couples must navigate COBRA, Medicare, and supplemental insurance coverage complexities.
Life insurance can come into play if spousal support or alimony is required for a term equal to the amount and duration of the agreed-upon support. This can be a miniscule concept when couples are younger; thus, longer policy terms are left on the existing life insurance. When someone is older and the existing life insurance policy is about to expire, a new policy with a death benefit and duration to cover a support obligation can be very costly.
Estate planning takes on a distinct level of importance for older couples seeking divorce. They might have adult children, grandchildren, or specific wishes for their assets in case of death, which enters the conversation when discussing divorce.
Divorce is a life-altering decision regardless of age, but older couples face complex challenges that require a sensitive and tailored approach. At Berner Law & Mediation Group, we offer tailored solutions that cater to the specific needs and concerns of couples who have spent a substantial portion of their lives together.